2020 (12) TMI 1096 - CESTAT NEW DELHI

CENVAT Credit - short/delayed payment of service tax - willful statement or willful suppression of facts with an intent to evade payment of service tax - extended period of limitation - Notification dated September 10, 2004 - period October, 2005 to March, 2007 - HELD THAT:- It is correct that section 70 of the Finance Act requires every person liable to pay service tax to himself assess the tax on the services provided by him and furnish a return, but at the same time the Circular dated April 23, 2009 also casts a duty on the assessing officer to effectively scrutinize the returns, at least at the preliminary stage. The appellant has been regularly filing the returns and so the Department cannot take a stand that it is only during the audit that it can examine the factual position. Thus, it cannot be urged by the Department that if the officers of the audit team had not conducted the audit, non-payment of service tax would not have been unearthed - It, therefore, follows that the Commissioner (Appeals) was not justified in holding that the extended period of limitation was correctly invoked. The extended period of limitation could not have been invoked in the facts of the present case as facts were not suppressed by the appellant.

In regard to the period from October, 2005 to March, 2006, the appellant had submitted working of ST-3 return in the reply to show cause notice, but it has been rejected by the Adjudicating Authority merely on the ground that the working was not supported by any document or a certificate from the Chartered Accountant. The Adjudicating Authority could have asked the appellant to supply the documents, if it was not satisfied with the explanation - The appellant has also stated that the computation of demand in the show cause notice is not correct. In this connection, reference has been made to the Notification dated September 10, 2004 that provides for abatement of 67%. Thus, service tax was effectively payable only on 33% of the gross value.

Further, in regard to the period from April, 2006 to March, 2007, the contention of the appellant is that the show cause notice has not explained as to how there was an alleged short-payment of ₹ 1,58,24,365/- during the aforesaid period. According to the appellant, the impugned order has confirmed the demand of ₹ 1,58,24,365/- without considering the TR-6 challans submitted by the appellant in the reply to the show cause notice. The challans have been enclosed with the Appeal.

It cannot, therefore, be said that the appellant had any intention, much less willful intention not to pay service tax in regard to the four audit objections referred to the Audit Report - It is, therefore, more than apparent that even otherwise, the appellant did not suppress facts with an intention to wilfully evade payment of service tax.

Appeal allowed - decided in favor of appellant.